Measuring the success of governance in Application Portfolio Management (APM) is critical for demonstrating its value, ensuring alignment with organizational goals, and identifying areas for improvement. Clear metrics and a structured approach to evaluation provide insights into how well governance processes are working and whether they are achieving desired outcomes.
This section outlines key performance indicators (KPIs), tools, and best practices for measuring governance success in APM.
1. Why Measure Governance Success?
- Justify Governance Efforts:
- Provide tangible evidence of the value governance brings to APM, such as cost savings, risk reduction, and improved efficiency.
- Drive Continuous Improvement:
- Identify weaknesses in governance processes and refine them over time.
- Enhance Stakeholder Buy-In:
- Demonstrate the effectiveness of governance to gain support from executives, IT teams, and business units.
- Ensure Alignment:
- Confirm that governance outcomes align with strategic goals and organizational priorities.
2. Key Performance Indicators (KPIs) for Governance Success
a. Application Portfolio Metrics
- Portfolio Size and Composition:
- Measure the number of applications in the portfolio, broken down by category (e.g., critical, redundant, underutilized).
- Application Rationalization Rate:
- Percentage of applications retired, consolidated, or replaced over a specific period.
- Technical Debt Reduction:
- Reduction in technical debt due to governance-led rationalization or modernization efforts.
b. Financial Metrics
- Cost Savings:
- Total cost savings achieved through application rationalization and optimization.
- Cost Avoidance:
- Costs avoided by preventing unnecessary application purchases or renewals.
- Return on Investment (ROI):
- ROI of APM governance initiatives based on savings versus investment in tools, processes, and resources.
c. Process Efficiency Metrics
- Decision Cycle Time:
- Time taken to evaluate and approve governance decisions (e.g., application onboarding or rationalization).
- Data Quality Improvement:
- Percentage of portfolio data (e.g., cost, usage, compliance) that meets accuracy and completeness standards.
- Compliance Rate:
- Percentage of applications that adhere to governance policies and regulatory standards.
d. Stakeholder Engagement Metrics
- Participation Rates:
- Percentage of stakeholders actively involved in governance activities, such as committee meetings or data updates.
- Satisfaction Scores:
- Stakeholder satisfaction with governance processes and outcomes, gathered through surveys or feedback sessions.
e. Risk and Compliance Metrics
- Risk Reduction:
- Number of vulnerabilities or risks mitigated through governance efforts.
- Compliance Audit Success Rate:
- Percentage of successful compliance audits conducted on the application portfolio.
3. Tools for Measuring Governance Success
a. APM Platforms
- Provide built-in dashboards and reporting capabilities to track governance metrics.
- Examples: LeanIX APM, Planview Enterprise One.
b. BI and Analytics Tools
- Enable custom reporting and data visualization for governance KPIs.
- Examples: Power BI, Tableau.
c. ITSM and CMDB Tools
- Offer integration with governance processes for tracking portfolio changes and data quality.
- Examples: ServiceNow, BMC Helix.
d. Feedback and Survey Tools
- Facilitate the collection of stakeholder feedback and satisfaction scores.
- Examples: SurveyMonkey, Microsoft Forms.
4. Best Practices for Measuring Governance Success
a. Align Metrics with Objectives
- Ensure that the KPIs selected reflect the goals of governance (e.g., cost optimization, risk reduction).
- Example: If governance aims to reduce costs, focus on metrics like cost savings and ROI.
b. Start Small and Expand Gradually
- Begin with a few high-priority metrics that are easy to measure and understand.
- Example: Track portfolio size and rationalization rate before adding more complex metrics like technical debt reduction.
c. Use Real-Time Dashboards
- Leverage tools that provide real-time insights into governance metrics for faster decision-making.
- Example: Use dashboards to monitor application compliance and rationalization progress.
d. Involve Stakeholders in Metric Selection
- Collaborate with IT, business units, and governance committees to identify meaningful metrics.
- Example: Business units might prioritize metrics related to application performance or business value.
e. Communicate Results Effectively
- Share governance success stories and progress with stakeholders to maintain engagement and support.
- Use simple, visually appealing reports and presentations to communicate results.
f. Regularly Review and Update Metrics
- Periodically assess whether the chosen metrics remain relevant as governance processes evolve.
- Example: As governance matures, add advanced metrics like predictive analytics for application lifecycle management.
5. Challenges in Measuring Governance Success and How to Overcome Them
- Challenge: Incomplete or Poor-Quality Data
- Solution: Invest in data collection tools and processes to improve accuracy and completeness.
- Challenge: Difficulty Demonstrating Intangible Benefits
- Solution: Use proxies or qualitative metrics (e.g., stakeholder satisfaction) to capture intangible benefits like improved collaboration.
- Challenge: Lack of Stakeholder Engagement in Measurement
- Solution: Involve stakeholders in defining metrics and highlight the value of measurement to their roles.
6. Case Study: Measuring Governance Success in APM
Scenario:
- A mid-sized organization implemented APM governance with a focus on application rationalization and compliance.
Metrics Tracked:
- Application rationalization rate, cost savings, compliance audit success rate, and stakeholder satisfaction.
Results:
- Retired 15% of redundant applications in the first year, saving $1M in costs.
- Achieved 100% compliance audit success through governance policies.
- Stakeholder satisfaction scores increased by 25% due to improved decision-making transparency.
Key Takeaways:
- Tracking both tangible (e.g., cost savings) and intangible (e.g., satisfaction) metrics provided a holistic view of governance success.
7. Conclusion
Measuring the success of governance in APM is essential for proving its value, driving continuous improvement, and maintaining alignment with organizational goals. By selecting meaningful KPIs, leveraging tools for tracking and reporting, and regularly communicating results to stakeholders, organizations can ensure that governance delivers tangible and measurable benefits. For beginners, starting with basic metrics and expanding gradually provides a practical approach to building a culture of data-driven governance.
